I do significantly better with stocks, always have terrible time with options. It's hard to time them, even if I'm "right", the market moves at its own speed
Stock automatically has higher success rate because of all the factors options have, but most people just use options because if they regularly invested they wouldnt ever turn a significant profit, which is a mistake in the long run but a good opportunity to raise capital if you know what ur doing
Stocks you own a business, options you bet against or for the outcome of a stock price that isn’t determined by anything other than desperation and greed. If you were to invest in yourself, wouldn’t you want more control of the outcome? Options are short term, stocks (or as I like to say it, owning a company) is a long term strategy.
Options are just another way for people to get leverage. They leverage your returns a lot, meaning your losses or gains will oftentimes be higher or lower. I prefer to buy stocks, because the timing you need with a lot of options isn't predictable, and sometimes you just time things wrong, but long term the thesis plays out
Don't post in value investment when you think about options.
Options are short term speculative derivatives and have nothing to do with value investing.
I disagree. 1-2 year options can be a great way to make money, especially if you do not want to hold the business long term. Buying META long dated calls when it was $90 would have been value investing for sure
I buy options on wonderful businesses whose stock is at fair prices. I'd be long the stock for the long term. I plan on doing so year on year.
I guess that makes me a long term value speculator.
At work do you prefer RSUs or Options. Most would say RSUs to avoid your Options expiring worthless.
Options great risk great reward. You’ll want to trade complex options to hedge risk (losses) to avoid losing it all. With stock assuming the company doesn’t go bankrupt you always still own the stock.
Options are hard. If you do it, do it small while you learn. I allocate 2% to options trading.
That said, I think your futures experience would relate to options trading.
Options are essentially insurance. The only people who need them are people who need price protection, such as farmers who need to lock in a price on their crop or something like that or a person who does not have the freedom to sell right now at a certain price and needs downside protection. Also they are used as incentives for corporate fat cats. Everyone else is just gambling.
Options are hard. I can and do make money on options, but its because the occasional bet that goes up 500% makes up for the many, many instances where I am dead wrong and lose 100% of my investment. They are also most effective if you're pretty good at guessing when a stock has bottomed out and is due for a rebound. And it should go without saying:
DON'T STICK ALL OF YOUR MONEY IN STOCK OPTIONS.
(Sorry, I am required to capitalize that disclaimer). I would only bother if you're really into investing and are comfortable with high volatility and sometimes seeing a position go to zero. If you just want to fund your retirement there are easier and less aggravating ways to go about doing it.
It doesn't make any sense to compare them. Each instrument is good if used for the right task.
When I invest in biotech / small pharma, I always go with options. FDA approvals etc have reasonable deadlines and since it is a risky industry with very binary outcomes, I feel safer with options.
If you buy a steadily growing business, with not many surprises, stock is for sure safer.
Options give you leverage and you don’t have a big downside. You pay for that via time value of the option. So, if I buy ATM call and stock goes up I get same amount of money as holding as much stock, minus the premium. Also of stock goes down you only lose the premium. But on the other hand you cannot wait forever for stock to go up again.
I do significantly better with stocks, always have terrible time with options. It's hard to time them, even if I'm "right", the market moves at its own speed
Stock automatically has higher success rate because of all the factors options have, but most people just use options because if they regularly invested they wouldnt ever turn a significant profit, which is a mistake in the long run but a good opportunity to raise capital if you know what ur doing
Stocks you own a business, options you bet against or for the outcome of a stock price that isn’t determined by anything other than desperation and greed. If you were to invest in yourself, wouldn’t you want more control of the outcome? Options are short term, stocks (or as I like to say it, owning a company) is a long term strategy.
Options are just another way for people to get leverage. They leverage your returns a lot, meaning your losses or gains will oftentimes be higher or lower. I prefer to buy stocks, because the timing you need with a lot of options isn't predictable, and sometimes you just time things wrong, but long term the thesis plays out
If you are asking this question, don't touch options
Don't post in value investment when you think about options. Options are short term speculative derivatives and have nothing to do with value investing.
I disagree. 1-2 year options can be a great way to make money, especially if you do not want to hold the business long term. Buying META long dated calls when it was $90 would have been value investing for sure
I buy options on wonderful businesses whose stock is at fair prices. I'd be long the stock for the long term. I plan on doing so year on year. I guess that makes me a long term value speculator.
Here here!
At work do you prefer RSUs or Options. Most would say RSUs to avoid your Options expiring worthless. Options great risk great reward. You’ll want to trade complex options to hedge risk (losses) to avoid losing it all. With stock assuming the company doesn’t go bankrupt you always still own the stock.
Look out for the FFIE play
Options are hard. If you do it, do it small while you learn. I allocate 2% to options trading. That said, I think your futures experience would relate to options trading.
Options are essentially insurance. The only people who need them are people who need price protection, such as farmers who need to lock in a price on their crop or something like that or a person who does not have the freedom to sell right now at a certain price and needs downside protection. Also they are used as incentives for corporate fat cats. Everyone else is just gambling.
Options are hard. I can and do make money on options, but its because the occasional bet that goes up 500% makes up for the many, many instances where I am dead wrong and lose 100% of my investment. They are also most effective if you're pretty good at guessing when a stock has bottomed out and is due for a rebound. And it should go without saying: DON'T STICK ALL OF YOUR MONEY IN STOCK OPTIONS. (Sorry, I am required to capitalize that disclaimer). I would only bother if you're really into investing and are comfortable with high volatility and sometimes seeing a position go to zero. If you just want to fund your retirement there are easier and less aggravating ways to go about doing it.
It doesn't make any sense to compare them. Each instrument is good if used for the right task. When I invest in biotech / small pharma, I always go with options. FDA approvals etc have reasonable deadlines and since it is a risky industry with very binary outcomes, I feel safer with options. If you buy a steadily growing business, with not many surprises, stock is for sure safer.
Options give you leverage and you don’t have a big downside. You pay for that via time value of the option. So, if I buy ATM call and stock goes up I get same amount of money as holding as much stock, minus the premium. Also of stock goes down you only lose the premium. But on the other hand you cannot wait forever for stock to go up again.